Frequently Asked Questions
A mortgage is a loan from a bank or building society that enables you to purchase property. The loan is repaid with interest over a number of years, with the term for doing this dependent on your personal financial circumstances.
A mortgage can be held by an individual or jointly between one or more people, but if you do not keep up your repayments, your home could be repossessed by the lender.
There are many advantages to using a mortgage adviser. Whether you’re a first-time buyer, a home mover or re-mortgaging, I can find the best deal for you!
Advantages of using a Mortgage Adviser
I have years of experience dealing with mortgages – I know the small print, which mortgages are possible in your situation and which are not.
With my expertise I am best placed to find you a better deal. I have access to hundreds of mortgage products, some of which are exclusive to us so are not shown on comparison sites, or offered by other brokers, or when you go direct to the lender.
I offer impartial advice, not promoting one product over another because of commission or an affiliation with the lender. We are regulated by the Financial Conduct Authority so we have to give you the best advice and make any costs transparent. If you go direct to the lender or via a comparison site they don’t need to tell you about other options.
Using me will save you time and hassle because I will research the mortgage market for you and handle applications from start to finish.
All mortgage lenders have their own criteria. The following factors all play a part in determining their mortgage offer and how much they are willing to lend to you:
• Amount you wish to borrow
• Size of your deposit
• Employment status and income
• Credit rating
• Existing debt
• Your age
• Length of the mortgage term
• Your credit status
• If you are applying solely or jointly
In order to be accepted, you need to convince lenders that you are able to repay your mortgage. To do this, lenders typically use your credit report to check your repayment history. Your credit file will contain current and existing records on items such as credit cards, loans, overdrafts, mortgages, mobile phone/s, some utilities payments and all accounts opened in the past six years. If you have had arrears, defaults, CCJs, debt management plans or previously been made bankrupt, there are mortgage options available which I can help you with.
A few mortgage lenders will lend you up to five times your salary. However, this is dependent on a number of factors including your age, number of dependants and current financial commitments. Lenders generally work out how much they will lend you based on what you can realistically afford each month after you have paid your bills, credit cards, loans etc.
I can help you understand how much you can realistically borrow before an application or credit search is completed, by assessing your individual needs and circumstances.
To buy a home with a mortgage, you will need to save a deposit of at least 5%. The more you can save, the better your mortgage rate will be. There are a few exceptions to this however as follows:
- If you already own a home, you can use the equity from your property for the deposit
- If you are a council tenant and are looking to buy your current home under the Right to Buy scheme, most mortgage lenders will now accept your Right to Buy discount as a deposit.
With property prices increasing, first time buyers are struggling to save enough money to buy a home. The government has therefore introduced ‘Help to Buy’ to enable first time buyers to get on the property ladder.
When buying a home, you will need to not only have enough money saved for your mortgage deposit, but also your mortgage fees, moving costs and legal expenses. I have compiled a handy list below of most of the possible purchase and moving expenses you may have to pay, to help you with your budgeting. The exact fees and amount you will pay, is dependent on the value of the property you are buying and your chosen mortgage lender, please note all costs below are approximate figures and should not be relied upon and there may be other unexpected costs.
Mortgage booking fee: Some mortgage lenders will charge this to secure a fixed-rate or tracker deal.
Cost: £0 – £250
Mortgage arrangement fee: Some mortgage products will incur a mortgage arrangement fee, in addition to the mortgage booking fee. This fee is either paid upfront or added to your mortgage debt. If you chose to add it to your mortgage, the cost will increase over the lifetime of your mortgage.
Cost: £0 – £2,000
Telegraphic transfer fee: Needs to be paid to the lender to transfer the amount you are borrowing for the mortgage to the seller’s solicitor.
Cost: £25 – £50
Valuation and survey fees: Charged by the lender to value the property you are buying. The cost varies according to which survey you choose:
Home condition survey: Most basic and cheapest of all the surveys and often used for new-builds.
Homebuyer’s report: More in-depth survey, assessing the inside and outside of the property, also includes a valuation.
Building survey: A complete survey generally used for older or unconventional properties. Although they are the most expensive, they are certainly worth considering, as it could potentially save you a lot of money if any structural problems are found with the property.
Searches: Your solicitor will arrange for the local authority to check whether there are any issues that could affect the property’s value. The local council can charge a fee for carrying out these searches and may also request that a drains search be done at the same time.
Cost: £250 – £300
Legal costs: You will need to instruct a solicitor to carry out the necessary legal work for you.
Cost: £850 – £1,500 plus VAT
Stamp Duty: Paid on all UK land and property purchases over £125,000. The percentage you pay is dependent on the purchase price of your property as follows:
• £125,001 – £250,000: 2%
• £250,001 – £925,000: 5%
• £925,001 – £1, 500,000: 10%
• £1,500,000+: 12%
If you are buying a second property, the percentage you will need to pay is calculated as follows:
• £0 – £39,999: 0%
• £40,000 – £125,000: 3%
• £125,001 – £250,000: 5%
• £250,001 – £925,000: 8%
• £925,001 – £1.5 million: 13%
• £1.5 million+: 15%
Moving costs: Paid to the removal firm (if you choose to use one) to pack, transport and deliver your possessions to your new home.
Cost: £300 – £600
When buying a home your mortgage lender will likely insist that you have Buildings Insurance in place before you exchange contracts.
Whilst it is not compulsory to have any other level of cover in place to buy a property, there are insurance policies that can help you through a rough patch. Please consider ASU can pay your mortgage repayments for a fixed period of time, should you find yourself out of work due to being made redundant, an injury or illness, whilst a Life Insurance policy could completely clear your outstanding mortgage debt, should the worst happen to you.
If you would like to know more about the various protection options that are available, I can help!
Most people can re-mortgage their home to get a new mortgage deal. There are many reasons why re-mortgaging could be a good option for you including:
- Getting a better mortgage rate
- Having the option to make overpayments
- Enjoying a more flexible mortgage
- Freeing up cash for some long-awaited home improvements
- Purchasing additional property
- Saving money on your monthly repayments
- Reducing your current term
If you would like to know which re-mortgage options are available to you, get in touch!
The first thing you will need to consider before you re-mortgage is how much you can afford to pay. You can do this by collating your mortgage paperwork and recent bank statements together, to see what your current interest rate is and how much your monthly outgoings are.
You will also need to check if you will need to pay any additional costs such as; an arrangement fee to your new lender for setting up the mortgage, an exit fee and/or early repayment charges for leaving your current lender, and valuation and legal fees. Some fees can be added to your mortgage.
Remember, if you choose to do this, you will have to pay interest on them. Luckily, most re-mortgage deals have no or low set up costs. But, it’s important to make sure you check first before committing to a new mortgage deal.
Part of my service in ensuring that you get the best re-mortgage deal, is to check whether a new mortgage deal would be the best option for you, based on the interest rate and any potential fees involved.
If your current mortgage deal is due to expire, then you should ideally start to look for a new mortgage at least three months prior to this, to ensure that everything is in place when this happens.
If you feel that your current mortgage deal is restricting you however, and are considering switching to either get a better rate, reduce your term or simply want a more flexible mortgage, then it has never been a better time to do so, with interest rates at an all-time low.
To check whether now is the right time for you to re-mortgage, get in contact and see if you can take advantage of the fantastic re-mortgage deals available.